Liability of Busy Bee Florist Shop: A Case Study

This case study analyzes the liability of Busy Bee Florist Shop and its partners to Friendly Bank. It examines the partnership relations and the applicability of the Partnership Act 1958 (VIC). The study concludes that Sonny is not a partner, while Violet is considered a partner and is liable for the debt.

Running head: CASE STUDY 0
CORPORATION LAW
MAY 16, 2019
STUDENT DETAILS:

CASE STUDY 1
To make suggestion toViolet and Sonny in respect of the liability to Friendly Bank in respect of a Busy
Bee Florist Shop, primarily this is essential to assess whether the partnership relations present
between the Busy Bee Florist Shop and Violet, and between Sonny and Busy Bee Florist
Shop. Thiscase study brings forward a query whether the partnership existed in the current situation
between Violet, Mary, Rosy, and Sonny. According to the Partnership Act 1958 (VIC), the profit’s
sharing states the partnership’s applicabilitybetween partners. The exception to the partnership’s
rules explains that the creditors are secured from the rule of partnership if there comprises any of
the necessary factors in the Partnership Act 1958 (VIC).
Further, the partnership can be described as a relation, which prevailed amid people who execute
the business’s functions in common with a purpose of earning the profits. In a famous case of Green
v Beesley (1835), it was held by the court that the contract amongst 2 or more people to be involved
in the partnership possessing the legally binding connection and have essential features of
contractual in a nature. In a current framework, this is obvious that Sonny is considered as the
worker and creditoron behalf of Rose and Mary Busy Bee Florist Shop and Sonny would not be
regarded as a partner.
In a case of Smith v Anderson (1880), the court laid down by his judgement that the member do not
create the legal unit at a period of creating a partnership.An ordinary partnership may be described
as a partnership of some people, which are intended together through agreements amid themselves
to endure the object of entering into the contract with one another. According to the Partnership
Act 1958 (VIC), for creating the valid partnership between the partners, it is required to satisfy the 3
elements. These three elements are below-
 Executing the functions of business
 In common
 With a purpose of generating profits

CASE STUDY 2
In this way, if any element amongst them is not present from a connection is not regarded to be the
partnership. Consequently, Sonny is only the business’s lender and may not be considered as the
partners as Sonny doesn’t know in respect of the debt from a Friendly Bank so Sonny would not be
considered as a partner as per the Partnership Act 1892. Consequently, the case of violet is same as
a case of Megevand; Ex parte Delhasse (1878). In the case of Megevand; Ex parte Delhasse (1878),
it was held by the court that a partner or creditor of a related business is given a right to control a
business. In the addition of this, Violet also has the right of the dormant business partner with a right
to share profits and losses, to assess the corporation’s books and the rights of getting the quarterly
business statement along with the rights of sharing the liabilities of the losses by partner.
Furthermore, Violet would be actually considered as a partner in addition to businesses for being the
lender, however this is obviously stated in a loan’s agreement that Violet being the lender would not
be considered as a business’s partner. However, the loan taken by Mary and Rose for busy bee florist
shop from Sonny and Violet states the debt’s nature, which is owed to them. According to
Partnership Act 1958 (VIC), the declaration may be bought forward by explaining that Sonny is not
considered as the partner. Consequently, Sonny is not able to pay the debt to a Friendly Bank in
respect of the Busy Bee Florist Shop. As well the factors mentioned under the Partnership Act 1958
(VIC) is also misplaced from a matter of Sonny. It was not amounted to execute the business’s
functions in common for a loan rendered to Busy Bee Florist Shop.
In a case of Television Broadcasters Ltd v Ashton’s Nominees Pty Ltd (1979), the court gave its
judgement that joint venture to motivate the trip of the circus did not create the members as the
partner. It was held by the court that even if the members became the joint ventures with a purpose
of generating the profits. The agreement however did not cover the requirements to distribute the
losses and most obviously, the conforming commitments contained the contract, whichwere
considered as the different provisions.Additional evidences if lack of partnership was laid down by
the court in the case of Exparte Coral Investments Pty Ltd [1979] which presented the circumstance

CASE STUDY 3
that workers were considered as the workers of the respondent and not regarded as the employees
of the applicants cooperatively1.
From the current situation of Sonny, it can be defined that she will not be considered a partner for
Busy Bee Florist Shop. Moreover, Sonny would not be liable for debt owed to Mary and Rose as
Sonny is not a partner according to the Partnership Act 1958 (VIC). Conversely, in Violet’s matter,
this can say that Sonny would be considered as partner due to having the rights of profit’s sharing,
business statements and assessing the partnership’s books. For that reason, a debt owed by Rose
and Mary to Friendly Bank would outspread to Violet as is considered as partner according to the
Partnership Act 1958 (VIC). The reason is that the partnership’s factors are satisfied by her2.
Moreover, according to the explanation under the Partnership Act 1958 (VIC), all the partners of
businesses are equally accountable like others for the all the debts together with provisions of
organisation, which ispractised at a period of continuing the partnership and ensuing a partner’s
death.Also after partner’s demise, the estate would bealso held accountable in a due course of
debt’s administration and obligationsas far as they continue regarding the partnership. Hence, as per
these situations, Violet would be considered as the Busy Bee Florist Shop’s partner. The same facts
have been discussed in the case of Lang v James Morrison & Co Ltd (1911) 13 CLR 1 at 11. The
major case for seeing Violet like a partner for Busy Bee Florist Shop at a period of working like
partner in respect of partnership business, in this matter Violet is performing like the agent for
other.
With reference of above mentioned example, a popular case of United Dominions Corporation Ltd v
Brian Pty Ltd and others (1985), in which the only functions carried out by people were considered
as partnerships according to the Partnership Act 1958 (VIC). Therefore, it was held by the courtthat
the respondent was pampered in land development activities that this was buying it by Brisbane.
The defendant has also transferred twenty per cent profits in a hotel. Additionally, it was considered
1 Paul Latimer, Repudiation of Partnership Contracts. (Routledge 2016)
2AngellaCampbell, Sister wives, surrogates and sex workers: outlaws by choice (Routledge, 2016)

CASE STUDY 4
as member of these ventures however, the defendant was considered as a main member in all
thesuggested ventures3.
With taking the reference of Smith v Anderson (1880), the functions of Violet extents to the
relationship of partners and executing the business’s function with the element ofstability
andreappearancecontrary to the inaccessible dealings that may not be regarded as repetitive.In a
case of Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974), it
was held by the court that thepressure would be enforced on the resolution, which may not be
considerable.
Therefore, this situation of Violet was considered to be constant with a case ofRuddock (1879) 5 VLR
who executed the functions of business of sole dealer and being grateful to the grandmother Bear
and one of the worker. Later, the court gave the judgement that although grandmother was not
actively participated in the consistentmanagement activities related to the business, Mrs Bear would
be considered as business’s partner and may not validate against estates of being regarded as
aninsolvent debtor in competition with creditors.
More, as per the general principles, it is stated by the court that the rights to the involvement in the
profits would be considered as the partners and nevertheless the stipulation of being regarded as
the inactivepartners or not accountable to loss. In this situation, Ruddock (1879) 5 VLR is a good
case. This case states that the relationships of companions are the result of the person considerable
right and a result that the partnership accountability from a sharing of revenues may not be ignored
in a conveyance’s form. In a succeeding matter of Violet and Busy Bee Florist Shop this may be
stated that they would be regarded as a partner since violet has fulfilled the related factors
mentioned under the Partnership Act 1958 (VIC)4.
3 James Edelman andBant Elise, Unjust enrichment.( Bloomsbury Publishing, 2016)
4 Mark Blackett-Ord and HarenSarah, Partnership Law. (Bloomsbury Publishing, 2015)

CASE STUDY 5
This way the Partnership Act 1958 (VIC) makes the focus on the characteristics of the relationship
amongst people so that this may determine that where there presented the partnership5. Provided
the facts that the characteristics render that evidence, which people carried on businesses in general
with purpose of getting profits then the partnership’s relationship would be searched to be present.
For the instance, the people may have made the term of sharing the profits however not the losses.
In addition, they may have particularly stated that the relation may not be considered as a
relationship of partners. The reason is that any party may be sharing profits as a worker or any
person was a loan provider, who is being reimbursed out of profits produced from aprofession.
According the Partnership Act 1958 (VIC), it is stated that there are valuable hands in taking decision
whether a particular connection is regarded as partnership relationship. On the other hand, the main
thing is to consider that the processes are not completely regardedas the formative of a problem. In
a popular case of Wiltshire v Kuenzli (1945), it was held by the court that the law court would
commonly have regard to every condition so that this may conclude the genuine factor of the
agreement amid the people. It is measuredthat the individuals who have made plan to do all the
things will make them as partners as per the law and no result may be provided to the recognised
intention of not being the partner. The relations between in a current framework of Violet and Busy
Bee Florist Shop would be considered as the partnership as per partnership act since Violet fulfilled
meaning, which has covered under the Partnership Act 1958 (VIC). The delivery by Violet in relation
to sharing of profits of the businessestogether with the understanding in assessing the book of
businesses and three-monthly business statement states that evidence that Violet would be
considered as a business’s partner. Consequently, Violet along with Rosy and Mary would be held
liable for the loan, which is taken from a friendly bank.
As per the above analysis it can be concluded that Sonny is not regarded as a partner of Busy Bee
Florist Shop. It is found that there is a no any accountability of Sonny to make the payment of debts
5New South Wales Consolidated Act, Partnership Act 1892 (2018)
http://www8.austlii.edu.au/cgi-bin/viewdb/au/legis/nsw/consol_act/pa1892154/

CASE STUDY 6
to Friendly Bank regarding Busy Bee Florist Shop6. Conversely, Violet would be regarded as a partner
of Busy Bee Florist Shop. Violet would be liable for debt as well as his duties of entity to Friendly
Bank as Violet fulfils the elements mentioned under the Partnership Act 1958 (VIC).
6MohammedAhmaduand Hughes Robert, Commercial Law and Practice in the South Pacific. (Routledge-
Cavendish, 2017).

CASE STUDY 7
Bibliography
A. Articles/ Books/ Reports
Latimer, Paul, Repudiation of Partnership Contracts. (Routledge 2016)
Edelman, James, and Elise, Bant, Unjust enrichment.( Bloomsbury Publishing, 2016)
Campbell, Angela, Sister wives, surrogates and sex workers: outlaws by choice (Routledge,
2016)
Blackett-Ord, Mark, and Sarah, Haren, Partnership Law. (Bloomsbury Publishing, 2015)
Ahmadu, Mohammed, and Robert, Hughes, Commercial Law and Practice in the South
Pacific.(Routledge-Cavendish, 2017).
B. Cases
Green v Beesley (1835)
Wiltshire v Kuenzli (1945)
Ruddock (1879) 5 VLR
Smith v Anderson (1880)
Exparte Coral Investments Pty Ltd [1979]
Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974)
United Dominions Corporation Ltd v Brian Pty Ltd and others (1985)
Lang v James Morrison & Co Ltd (1911) 13 CLR 1 at 11
C. Legislations

CASE STUDY 8
The Partnership Act 1958 (VIC)
D. Others
Victorian current Act, Partnership Act 1958 (2018)
http://classic.austlii.edu.au/au/legis/vic/consol_act/p84a1958135/s5.html